Free cash flow generation remains highly unstable, swinging from a 19.6% margin in 2025Q4 to a negative 3.8% in 2024Q2, largely driven by unpredictable working capital swings.
| Cash from Operations | 2.03B | 1.99B | 1.95B | 2.1B | 2.11B | 1.61B | 1.69B |
| Operating CF Margin % | - | 9.64% | 9.92% | 10.75% | 11.52% | 9.14% | 9.83% |
| Operating CF Growth % | 190.46% | 1.9% | -7.14% | -0.57% | 31.49% | -4.74% | - |
| Net Income | 1.5B | 2.15B | 2.05B | 1.62B | 1.95B | 2.27B | 2.06B |
| Depreciation & Amortization | 449M | 578M | 580M | 610M | 633M | 625M | 630M |
| Stock-Based Compensation | 107M | 130M | 125M | 114M | 67M | 76M | 0 |
| Deferred Taxes | 510M | 0 | 531M | 743M | 563M | 600M | 652M |
| Other Non-Cash Items | -755M | -517M | -1.28B | -1.01B | -806M | -599M | -1.6B |
| Working Capital Changes | -247M | -357M | -59M | 22M | -293M | -1.37B | -52M |
| Change in Receivables | -319M | -216M | -150M | -171M | -440M | -1.16B | -257M |
| Change in Inventory | -159M | -142M | -81M | 111M | -402M | -435M | 100M |
| Change in Payables | 165M | 90M | 126M | -13M | 481M | 263M | -113M |
| Cash from Investing | -3.14B | -1.05B | -914M | -558M | -398M | -1.76B | 19.99B |
| Capital Expenditures | -508M | -482M | -401M | -387M | -310M | -248M | -237M |
| CapEx % of Revenue | 2.55% | 2.34% | 2.04% | 1.98% | 1.69% | 1.41% | 1.38% |
| Acquisitions | -109M | 0 | -313M | -147M | 0 | -1.48B | -78M |
| Investments | - | - | - | - | - | - | - |
| Other Investing | -2.41B | -447M | -160M | 24M | -29M | -32M | 20.3B |
| Cash from Financing | 924M | 617M | -573M | -478M | -822M | -263M | -21.54B |
| Debt Issued (Net) | 1.37B | 967M | -423M | 1.14B | 8.2B | -12M | -16M |
| Equity Issued (Net) | -178M | -163M | 33M | 0 | 0 | 0 | 0 |
| Dividends Paid | -64M | -64M | -55M | -41M | 0 | 0 | 0 |
| Share Repurchases | -200M | -200M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -205M | -123M | -128M | -1.58B | -9.03B | -251M | -21.53B |
| Net Change in Cash | -188M | 1.62B | 387M | 1.05B | 890M | -451M | 143M |
| Free Cash Flow | 1.52B | 1.51B | 1.55B | 1.71B | 1.8B | 1.36B | 1.43B |
| FCF Margin % | 7.62% | 7.3% | 7.88% | 8.77% | 9.83% | 7.73% | 8.32% |
| FCF Growth % | 10.63% | -2.84% | -9.57% | -4.94% | 32.67% | -4.83% | - |
| FCF per Share | 3.33 | 3.27 | 3.38 | 3.74 | 3.97 | 2.99 | 3.14 |
| FCF Conversion (FCF/Net Income) | 1.01x | 0.95x | 0.98x | 1.34x | 1.10x | 0.72x | 0.12x |
| Interest Paid | 249M | 0 | 550M | 570M | 0 | 21M | 46M |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working capital cycle volatility
As reported in financial statements, GEHC's operating cash flow to net income ratio has fluctuated wildly, dropping to a low of 0.19 in 2025Q2, which suggests that reported accounting profits are frequently decoupled from the actual cash generated by the company's core medical technology operations.
The significant divergence between net income and operating cash flow indicates that earnings quality is heavily influenced by non-cash accruals and timing differences in revenue recognition. Investors should monitor whether this disconnect persists, as it may imply that the company's profitability is more sensitive to accounting adjustments than to sustainable cash-generative growth.
Based on the provided quarterly data, GEHC's free cash flow margin has demonstrated extreme volatility, swinging from a peak of 19.6% in 2025Q4 to a negative 3.8% in 2024Q2, highlighting the inherent difficulty in maintaining consistent cash generation amidst lumpy hospital equipment delivery cycles.
The erratic nature of free cash flow suggests that the company's capital-intensive business model remains vulnerable to the timing of large-scale installations. This lack of predictability in cash conversion may continue to weigh on valuation multiples until management can demonstrate a more stable trajectory in recurring service-based cash flows.
According to recent SEC filings, GEHC experienced a massive $478 million working capital outflow in 2024Q2, a trend that appears to be a recurring drag on cash flow, often offsetting gains made during stronger quarters like 2025Q4 when working capital contributed $260 million to the bottom line.
The sharp fluctuations in working capital suggest that the company struggles with inventory management and the timing of receivables collection across its global footprint. This volatility warrants further investigation into whether these swings are purely seasonal or indicative of deeper inefficiencies in the supply chain and order-to-cash process.
Based on reported figures, GEHC has consistently utilized cash for debt-related obligations and modest share repurchases, such as the $100 million buyback in 2026Q1, even as free cash flow generation remains inconsistent, suggesting a management focus on balancing shareholder returns with necessary post-spin balance sheet deleveraging.
The decision to initiate share repurchases while free cash flow is still stabilizing may indicate management's confidence in the long-term cash-generative potential of the service-heavy business model. However, investors should monitor whether these capital returns are sustainable if the current volatility in operating cash flow continues to compress the company's available liquidity.
Quick answers to the most common questions about buying GEHC stock.
GE HealthCare Technologies Inc. (GEHC) generated $1.99B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
GE HealthCare Technologies Inc. (GEHC) generated $1.51B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
GE HealthCare Technologies Inc. (GEHC) spent $482.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, GE HealthCare Technologies Inc. (GEHC) returned $64.0M to shareholders via cash dividends and spent $200.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.